New Delhi / Chennai: The Goods and Services Tax (GST) Council, at its 36th meeting today, is expected to reduce the tax rate on electric vehicles, ease tax issues for the solar sector and deliberate on the tax rate on lotteries.
The meeting will be chaired by Union Finance Minister Nirmala Sitharaman. She is expected to chair the meeting through video-conferencing in Delhi.
This will be the first GST Council meeting after the Union Budget was tabled before the Parliament on 5 July.
According to sources, the GST Council is expected to draw focus on lowering tax rates on electronic vehicles (EVs), solar power projects as well as rationalising tax rates on lottery.
Having already announced several sops for the EV sector including Income Tax exemption and reduction in customs duties for certain components in the Union Budget, the government is now expected to push for a further reduction of GST rate cut from 12 per cent to 5 per cent.
Reports said the issue of GST rate cut on EVs was earlier sent to a rate fitment committee to a rate fitment committee, whose recommendations are likely to be placed before the council.
While the Modi government wants to encourage domestic manufacturing of e-vehicles, Nirmala had also said in her Budget speech that the government wants to develop India as a manufacturing hub for electric vehicles and want to encourage their purchase.
According to FICCI, rationalisation of GST rates for electric vehicles will provide a big boost to the sector.The Council is also expected to discuss the tax incidence for the solar sector.
Currently, as per a notification issued earlier this year, 70 per cent of the cost of a solar plant is considered as goods and is taxed at 5 per cent.
The remaining 30 per cent is considered as services and is taxed at 18 per cent. Solar manufacturers have approached the Council saying that the break up of goods and services is more along the lines of a 90-10 split rather than 70-30.